Kinetic Engineering raises Rs 100 cr, AIG picks stake

NEW DELHI: Global asset management firm AIG has picked 14.5 per cent in Kinetic Engineering, which has just completed a Rs 100-crore fund raising programme.

Pune-based KEL is also merging Jaya Hind Sciaky (JHS), an auto ancillaries group concern, with itself as part of its strategy to consolidate in the component space.

"Over the last two months we have been completing a total funding programme for KEL. We have just completed the process and brought in AIG as a partner," Kinetic Engineering Ltd Managing Director Sulajja Firodia Motwani said.

She said AIG has invested about Rs 25.6 crore via subscription of compulsory convertible preferential share priced at Rs 156 per share.

"These are convertible into equity shares within 18 months and it would amount to 14.9 per cent stake in the company," she added.

KEL had also raised $18 million (approximately Rs 72 crore) through Foreign Currency Convertible Bonds. "These have been listed at the Singapore Stock Exchange," Motwani said.

She said promoters Firodia family have also increased their investments in the company by Rs 26 crore through convertible equity shares. "In 18-month's time, the promoters would have stake above 51 per cent, AIG 14.9 per cent," she said.

Other investors like Reliance Capital and Clearwater Capital Partners had already picked stake in KEL.

She said part of the funds raised have been utilised for expanding the company's gearbox production capacity. "We had set up a new facility at Singur for supplying complete transmission set for Tata Nano and also have been expanding the capacity of out Ahmednagar plant," she said.

After the expansions, the company will have a total gearbox production capacity of 2 lakh per annum, Motwani added.

She said the company had a book order to the tune of Rs 200 crore for the year 2008-09 and expects to clock a turnover of Rs 175-200 crore during the fiscal.

KEL expects to close this fiscal with a turnover of Rs 100 crore.

On the merger of JHS, Motwani said that KEL board has approved the proposal.

"We want to consolidate in the components business. This will help in KEL's focus on becoming a major component supplier and develop products for Tier I orders," she said, adding that the company already supplies to global players, including Visteon.